R v Fischer No. Sccrm-02-373, Sccrm-02-413

R v FISCHER
[2003] SASC 114
Court of Criminal Appeal: Doyle CJ, Duggan and Gray JJ

DOYLE CJ: I would dismiss the appeal against conviction. I agree with the reasons given by Duggan J for so deciding.
I would allow the appeal against sentence. I would order that the sentence imposed by the District Court be varied by including an order that the sentence imposed by the District Court be suspended upon the appellant entering into a bond to be of good behaviour for a period of three years. A condition of the bond should be that the appellant pay to Murray Bridge Basketball Association Incorporated the sum of $8,155.30, less any amounts already paid by the appellant, at the rate of $50 per week commencing from Monday 31 March 2003. A further condition of the bond should be that the appellant perform 100 hours of community service within 18 months from the same date. I agree with the reasons given by Duggan J for allowing the appeal against sentence and for ordering that the sentence be suspended.
DUGGAN J. The appellant was found guilty by verdict of a jury of 17 offences of fraudulent conversion. He was sentenced to a global head sentence of imprisonment for two years and the non-parole period was set at imprisonment for one year. He has appealed against conviction and sentence.
According to the prosecution case, the appellant fraudulently converted money and the proceeds of cheques to his own use after funds had been entrusted to him in his capacity as treasurer of the Murray Bridge Basketball Association Incorporated (the Association). It was alleged that the amount converted as a result of the offences totalled approximately $8,000.
The appellant became honorary treasurer of the Association in April 1998. The alleged offending took place in the latter half of 1999. According to the prosecution case, the appellant had control of the Association’s finances. He received incoming revenue from sources such as subscriptions, gate takings and bar takings. It was alleged that in the case of the counts on which he was convicted, he either appropriated the funds without depositing them in the Association’s bank accounts or drew cheques on the Association accounts and used the proceeds thereof for his own use.
The first ground of appeal arises out of observations made by the trial judge in his summing-up concerning the cross-examination of a key prosecution witness, Mrs Watkins and, to a lesser extent, her daughter.
Mrs Watkins had been a member of the Association for over 20 years. At the time of the alleged offences she was the secretary of the Association. She attended to the banking of the Association from time to time. She gave extensive evidence in relation to the duties and responsibilities of the appellant and his activities as treasurer and there was considerable conflict between her evidence and that of the appellant on these topics. She also gave evidence of facts surrounding the individual transactions which formed the basis of the counts in the information.
The defence consisted of a complete denial by the appellant of any dishonesty in relation to the Association’s funds. He was 19 years of age when he assumed the role of treasurer and 20 at the time of most of the alleged offences. He inferred that any shortfall of funds was the fault of Mrs Watkins who, he said, performed an integral role in the financial affairs of the Association.
When cross-examined Mrs Watkins was asked a number of questions about her own financial situation. One of the topics raised was the payment for her daughter’s wedding which had taken place 11 years previously. She said the wedding cost more than was anticipated. She agreed that she had been summonsed to court over the debt and had reached an agreement whereby she paid off the debt by instalments.
It was then suggested to the witness that she had not paid all the bills for the wedding. She said she was sure she had paid all the debts. She was asked about specific wedding expenditure including the hiring of suits. She denied that anything was owed in respect of these items.
Mrs Watkins was then asked about a bill for the repair of her car by a man named Morris. It was put to her that she owed money for the repairs. She denied that this was so. She said the car was repaired more than 15 years ago and she gave the money to her son so that he could pay it to the repairer. She said that he did not pay the account and that she paid it when she found out the amount was still owing.
There was no other evidence in the case to contradict the denials on these topics and when the trial judge was dealing with her evidence in his summing-up he said:
“Of course, it is she who is targeted by the accused as the architect and benefactor of any defrauding of the association in this matter. Many allegations were put to her and they were strenuously denied in the course of an attack on her credit during cross-examination. Remember that what is evidence in this case are her answers; a denied question is not evidence. So that questions about her daughter’s wedding or the hire of suits, or the payment of an account to Mr Morris, are not evidence of anything because the allegations were denied. So you can simply put them out of your mind.”
Our attention was also drawn to a comment which the trial judge made in relation to the cross-examination of Mrs Watkins’ daughter about an incident outside a hotel:
“She denied abusing the accused after he was charged and released on bail, and, again, what she is alleged to have said to him is not evidence, as it was denied.”
The appellant gave evidence about this incident and stated that Ms Watkins was in a drunken state on this occasion and said to him “We are going to make sure you go to gaol”.
The jury adjourned for a break shortly after the trial judge referred to these issues and defence counsel suggested to him that he had not dealt with this aspect with sufficient clarity. The judge agreed to return to the topic. He did so when the jury came back into court:
“Ladies and gentlemen of the jury, you will remember that towards the end of the first part of what I have had to say I spoke to you about the cross-examination of Mrs Watkins and Shavaughn Watkins, where questions [were] asked about Mrs Watkins’s daughter’s wedding, the hire of suits and the payment of an account to Mr Morris, and where an allegation was put to Mrs Watkins [Ms Shavaughn Watkins] about what she said outside the hotel at Murray Bridge.
Mr McKenney thinks that I may have given you the wrong impression as to the use you can make of that. You will recall that each of those allegations was denied by the respective witnesses. Some reference was made to those topics in Mr McKenney’s summing-up.
If I said to you that the answer and the question is not evidence, then I have given you the wrong impression, I didn’t mean to say that. The accusation has been denied and so that is it; there is no accusation, there is no evidence of an accusation. That is what I meant to say to you. So that you should bear in mind, when you are balancing the evidence, that there is no evidence from that part of that cross-examination about those assertions, because they have been denied. You cannot get a plus, as it were, out of a question alone, you have to have the whole thing together. You have questions and denials and the denial doesn’t add anything to the question, so there is no evidence of the allegation; that is what I meant to say.”
It was argued that the comments made by the trial judge concerning this aspect of the cross-examination of the two witnesses were prejudicial to the appellant’s case because they unduly narrowed the jury’s function of assessing the witnesses. According to the argument, demeanour was an important part of that assessment and the jury were entitled to take into account the manner in which the denials were made when assessing demeanour.
In the passages referred to, the trial judge was directing the attention of the jury to an aspect of their assessment of the evidence which is often referred to in jury charges. It is an appropriate topic for direction. In some cases it is important to ensure that allegations which are denied and not substantiated by other evidence do not assume the status of positive evidence in the minds of the jurors. This was the case with respect to the allegations put to Mrs Watkins.
It was also correct to say in relation to the evidence of Shavaughn Watkins that the questions about the alleged abuse by her could not be used to prove what was asserted in them if there was a simple denial. It would have been better, however, if the trial judge had reminded the jury at this point that the appellant had given evidence about the alleged abuse by Shavaughn Watkins and that it was open to the jury to act on his evidence. Nevertheless, it is unlikely that the jury would have overlooked this part of the appellant’s evidence which went into the alleged incident in some detail.
I do not accept the appellant’s assertion that the impugned remarks detracted from the other directions given by the trial judge on the topic of assessing the credibility of witnesses. Those directions included the following observations:
“In assessing the evidence, you must have regard to what counsel have said to you about the whole of the evidence and you must consider all of the evidence.
When considering the evidence, there are some things that you might look at. Perhaps they are mostly matters of commonsense and they have been mentioned to you in part by counsel. When you are assessing a witness’s evidence have regard to how he or she presented in the witness box. Have regard to what we call demeanour; the way a witness impresses you as to whether he or she is telling a plain straightforward untarnished story, perhaps the truth of the matter, or whether there are indications of untruthfulness or unreliability and, if so, to what extent. Have regard to how the witness’s story stood up in cross-examination and, of course, how it fits in with the other evidence in the case which you find to be acceptable. You will consider the plausibility of the evidence given and its inherent or intrinsic reliability. That is, how it stands, how it hangs together, whether it has the ring of truth about it.
Natural differences in temperament may go to your judgment of reliability of witnesses. People vary greatly in their behaviour in the witness box and generally, some are more educated, some are more articulate, some are more confident, some are more nervous. Perhaps we have seen some or all of that in this case. Some have a better presence and some are more experienced. Have regard to that in judging how people come across in the witness box.
When you consider what I’ve called ‘demeanour’ and what you think about the reliability or truthfulness or a person bear in mind, not only the differences in personalities, but also the differences in experience of life when you assess them within the unfamiliar confines of this courtroom.”
I am confident that the jury would have understood the logic behind the direction complained of, namely, that the mere making of an assertion cannot establish the fact which is being asserted. I cannot agree that the remarks would have resulted in the jury taking an unduly restrictive view of their role in assessing the witnesses. Furthermore, it is difficult to appreciate how the manner in which those denials were made could have thrown much light on the credibility of the witnesses.
The next ground of appeal complains that the trial judge erred in his directions concerning that element of the offence which requires proof of an intention to defraud. There was no quarrel with the directions on the legal requirements for this element. The trial judge’s directions were in accordance with the judgment of this court in R v Balnaves (2000) 77 SASR 433 which applied the decision of the High Court in Peters v The Queen (1998) 192 CLR 493 at 504. In Balnaves this court held that s 186 of the Criminal Law Consolidation Act 1935, which defines the offence of fraudulent conversion, does not contemplate that the concept of acting fraudulently or dishonestly for the purposes of the offence of fraudulent conversion is to be considered in some special sense. Accordingly, the question as to whether the act was dishonest for the purposes of the section is to be decided by the standards of ordinary decent people.
The jury in the present case were told that if they were satisfied beyond reasonable doubt that the appellant converted the property the subject of a particular count, they must also be satisfied that the appellant intended to deny the owner’s rights to the property. They were also told that the prosecution must prove that such a state of mind was dishonest based upon the standards of ordinary decent people.
It is difficult to relate the argument presented by the appellant on this ground to the complaint in the ground itself. I have said that no criticism was made of the legal directions on the elements of the offence of fraudulent conversion involving the requirement of an intention to defraud. Nor was there any criticism of the manner in which the trial judge related these directions to the individual circumstances relied upon by the prosecution to prove the various counts.
However, while purporting to address this ground of appeal, the appellant’s counsel complained about two passages in the summing-up and it is appropriate to deal with those criticisms.
In the first passage, the judge commented on submissions made to the jury by Mr McKenney who was counsel for the appellant at the trial. Mr McKenney put to the jury that the appellant might have been naïve and negligent, but that he was not dishonest. He also reminded the jury that the appellant was a young man and that this should be taken into account when considering the answers he gave in evidence. He suggested that the appellant was “pretty trusting”. In his address, Mr McKenney also alluded to the appellant’s employment at a hotel and the fact that he was an eager and popular employee. He said that the appellant worked long hours at the hotel.
In his summing-up the trial judge said:
“It seems to me – and again this is a matter for you – that Mr McKenney has submitted that the accused was negligent with the books but not dishonest, and that you should consider his usefulness [sic] and that he was popular at the hotel. Though these may all be so, it is hard to see how they are relevant. You may find them to be so when you are weighing the credit of the respective witnesses, however, and it is for you again to decide.”
(It is clear from subsequent discussion in the case that the trial judge used the word “youthfulness” and not “usefulness” in this passage.)
Mr McKenney complained about these remarks before the conclusion of the summing-up and, in response, the trial judge made the following further comments to the jury:
“The other matter that Mr McKenney asked me to say something about was this: I said to you towards the end that Mr McKenney had submitted that the accused was negligent with the books but not dishonest and that you should consider his youthfulness and that he was popular at the hotel and enthusiastic and then I said I found it hard to see how that was relevant, but it was a matter for you.
He has asked me to say to you that the defence case is that it is relevant because the youthfulness of the accused may relate to his naivety and to whether or not he was able to be overborne by Mrs Watkins in this period and finally that his enthusiasm was relevant to his time at the hotel and the way he approached his job and, therefore, the hours that he devoted to it.”
It was argued on appeal that the trial judge was not forceful enough in these directions and that he should have given particular emphasis to the argument put on the appellant’s behalf during counsel’s address to the jury that the appellant was naïve and, perhaps negligent, but that he had no dishonest intention.
In my view, the trial judge provided the jury with an adequate summary of Mr McKenney’s arguments on these issues when he re-directed them in the last quoted passage. Furthermore, I do not think it was necessary for the judge to give any further directions on the issues which were raised by defence counsel.
The essence of the defence case was that the appellant did not convert to his own use the monies which were the subject of each count. The judge dealt with this topic at length and he explained the appellant’s version in relation to each of the alleged offences. There was no suggestion by the appellant that he mistakenly took Association funds or that they came into his possession through negligence or inexperience. In the case of only one of the counts on which he was convicted, did the appellant concede that he used Association money for his own purposes. In answer to count 10 in the information he agreed that he used Association funds to make a payment on his car. He said he told Mrs Watkins about this and she agreed to him using the funds on condition that he repaid them. Mrs Watkins denied discussing this matter with the appellant.
It was necessary for the jury to find that the appellant had the necessary mental element in order to convict him on any count. However, the comment made by defence counsel in his address to the jury that the appellant was young and naïve had no relevance to the principal issue of contention in the case, namely, whether Association funds were used by the appellant for his own purposes. In the case of count 10, the only exception to the appellant’s general defence that he did not receive the funds, the appellant’s youth and possible naivety was of little relevance to the claim that he obtained permission from Mrs Watkins to use the funds for the car payment on condition that he reimburse the Association.
Against this background, I would reject the submission that the trial judge failed to direct the jury adequately on the relevance of the appellant’s youthfulness and claimed naivety. These matters may have been relevant in a general sense to the jury’s assessment of the evidence, but the trial judge reminded the jury of the defence arguments in relation to them.
The appellant complains of a further passage in the summing-up which dealt with the evidence of the defence witness Mrs Hobbs. The trial judge said:
“The defence case essentially is that the accused did not take anything that he was not entitled to. Mr McKenney has painted the plaintiff as a young and inexperienced and overwhelmed man, who became treasurer to help the association out of a spot. Perhaps you may think that the evidence of Mrs Hobbs doesn’t support that. She knew the accused before he became treasurer and knew that he came highly recommended for his bookkeeping skills from a local business, an experience that you might think he chose not to tell us about. That is a matter to you. He seemed, you may think, to be competent: there were no problems in nearly [the] first 18 months.”
Mrs Hobbs said in evidence that she had been involved with the Association for some years. She was president from 1996 until 1998 and, during part of that time, the appellant was treasurer. She said she had a good working relationship with the appellant and she had no cause for concern about how he was doing the job. She said he needed some extra guidance at the beginning, but she said that would occur with anyone taking over a new job. Mrs Hobbs stated that she and the appellant worked closely together and she had no problem with his honesty.
Mrs Hobbs also gave some evidence which painted an unfavourable picture of Mrs Watkins. However, in so far as her evidence related to the appellant, Mrs Hobbs was a character witness. Her evidence was to an extent double-edged in that it tended to suggest that the appellant had performed his tasks effectively while he was treasurer. It is obvious that she was deeply involved in the administration of the Association at the highest level and, although she worked closely with the appellant, she had no cause for concern about any aspect of his work. This evidence had a tendency to cut across the defence submission that the appellant was immature, naïve and negligent in his duty.

It was against this background, that the trial judge asked some questions of the witness at the conclusion of her cross-examination:
“QDid you know Gavin Fischer before he became treasurer?
AHe was an acquaintance, yes.
QDid you talk him into being treasurer in 1998?
AAlong with several other people, we were desperately looking for someone to take over that position and at that stage I knew that Gavin had been doing the bookwork for another firm that I knew and he came highly recommended, so it was put to the committee that he be elected so a decision was made by the committee.
QIn what way – what sort of history did you know about then, from his point of view?
AIn relation to Gavin’s work?
QYes.
AHe was doing bookwork for a company called Bridge Bag-away at the time.
QWhat sort of company is that?
AA waste management company in Murray Bridge.
QIs that where the recommendation came from?
AYes.
QYou knew someone there or something like that?
AYes, I did, and I’d heard that he was very good with figures and we needed somebody who was interested in doing it. We had – like most sporting bodies or any committees it’s hard to fill the positions.
QYou said that you spent some time with him in 1998 is that –
AAs a president’s role.
QBut helping him doing the books or explaining to him or what?
AI did explain some things, but my husband also helped too, my husband had been a past treasurer of the basketball association and he’d had lots of experience, which he was able to pass some things on to Gavin. But I was very much a hands-on president who was very interested in what was happening and I believe that the buck stopped with me at the end of the day.”
It was argued that the trial judge’s summary of Mrs Hobbs’ evidence in the passage in his summing-up which is set out above was inaccurate and that the evidence itself was partly hearsay.
In my view, it was appropriate for the trial judge to make the comment that the jury might think the evidence of Mrs Hobbs did not support the picture which the defence had painted of the appellant as being an inexperienced and overwhelmed young man. It was also relevant to remind the jury that, in Mrs Hobbs’ view, the appellant appeared to have performed his duties without any real difficulty over a period of about 18 months.
As for the other aspect of her evidence summarised by the trial judge, I do not think it was inaccurate to say that she knew the appellant came highly recommended for his book-keeping skills from a local business. Mrs Hobbs said in evidence she knew that he had been doing bookwork for a local company and he came highly recommended. She said she had heard that “he was very good with figures”. In my view the jury would not have been misled by the judge’s summary.
The evidence concerning the nature of the appellant’s employment with the local company was hearsay and, although it is somewhat curious that the appellant did not mention this job when outlining his employment history at the commencement of his evidence, I think it would have been better if the trial judge had not commented on it in the way in which he did.
However, I am confident in saying that the judge’s comments could not have led to a miscarriage of justice. Again, it is relevant to have regard to the issues raised by the allegations and the appellant’s answer to them. For the reasons which I have explained, experience or lack thereof in book-keeping skills was of very little relevance in this case to the question as to whether he had converted Association funds to his own use and, if he had done so, to his state of mind at the time. Furthermore, I am of the view that, in the context of the summing-up and the issues raised at trial, these remarks would not have reflected on the appellant’s credibility to such an extent that they created the risk of a miscarriage of justice.
I would reject the argument that the trial judge’s directions were deficient in the respects argued by the appellant and I would dismiss the appeal against conviction.
The appellant has appealed against his sentence on the grounds that it is manifestly excessive and that the trial judge should have suspended any sentence of imprisonment which was imposed.
The appellant is now 23 years of age. I have referred to the fact that he was 19 years of age at the time he became employed by the Association. The offences were committed when he was 19 and 20 years of age. He has no previous convictions and has been in employment since he left school at the age of 16.
The appellant’s age and previous good character were important factors to take into account in the exercise of the sentencing discretion. On the other hand, they had to be considered along with certain aggravating factors. The offences, which were committed over a period of approximately four months, involved a breach of trust which had been placed in the appellant by a community organisation. Deceit was required to hide the fraudulent conduct. The offences were denied. There was no restitution.
I deal first with a specific complaint made by the appellant’s counsel arising out of the sentencing remarks. The passage to which attention was drawn echoed the comment made by the trial judge in his summing-up concerning the appellant’s previous experience. When sentencing, the trial judge said:
“These offences were committed when you were the voluntary treasurer of the Murray Bridge Basketball Association. They occurred after you had been treasurer for about 15 months, during which time there had been no complaint as to your capacity as treasurer. Indeed, the witness, Ms Hobbs, whom you called at trial, referred to the fact that you came to the office well credentialed because of your previous experience. That was experience of which you chose not to tell the jury while you were giving evidence.”
It was argued that the failure of the appellant to refer to this aspect in his evidence was not a matter relevant to sentence. However, in my view this was a comment made in passing while the trial judge was addressing the fact that there had been no complaints about the appellant’s performance as treasurer during the first 15 months. I cannot think that it would have played a role in the assessment of the appropriate sentence. It was implicit in the jury’s verdict that the behaviour of the appellant was dishonest, rather than simply naïve and incompetent. This factor could not be ignored in fixing penalty. The trial judge’s comment did not add anything of significance to that consideration.
In view of the nature of the offences and the aggravating factors to which I have referred, I am of the opinion that the head sentence and non-parole period were not manifestly excessive.
However this was a case which warranted serious consideration of the power to suspend the sentence. I say this because the appellant was only 19 years when the offending commenced. He has a good work record and employment is open to him at the present time. He has no previous convictions. He has indicated a preparedness to make restitution by instalments, although this could only be achieved if he remained in employment.
When the learned judge came to consider whether to suspend the sentence he said:
“It has been submitted that, because of your age, your total lack of criminal history, and your present employment, it is appropriate to suspend that sentence. That you have no criminal record, and that you are unlikely to re-offend, are not matters which carry as much weight in a matter such as this as in other types of offending for, as I have said, were you not seen to be a person of good character, in whom trust may be reposed, you were unlikely to have obtained the position in the first instance.”
In my view, the weight to be given to the appellant’s good character and the unlikelihood of re-offending should not have been reduced by reason of the circumstances referred to by the learned judge. The fact that the offences involved a breach of trust was a relevant consideration when considering the gravity of the appellant’s conduct. It was a factor which the trial judge stressed earlier in his sentencing remarks when deciding that a term of imprisonment was appropriate. However, in the circumstances of the present case, this consideration should not have had the further effect of reducing the significance of the appellant’s good character.
Obviously there are cases in which, because of the existence of aggravating features, good character will not carry the weight which would otherwise be the case. An example is where fraudulent conduct takes place over a lengthy period of time: R v Cameron and Simounds (1993) 171 LSJS 305 at 306. There are other cases in which the defendant’s standing in the community, as in the case of a holder of public office, facilitates the offending: R v Jackson (1988) 33 A Crim R 413; R v Nath (1994) 74 A Crim R 115 or where the nature of the offence or its seriousness will render good character of little significance: R v Leroy [1984] 2 NSWLR 441.
However, this case did not come within any of these categories. The mere fact that the appellant was appointed to a position of trust because of his good character should not prevent him from being given full credit for good character during the sentencing process. Nor was it appropriate for the learned judge to apply the same reasoning to the consideration that the appellant was unlikely to re-offend, thereby lessening its effect. Furthermore, it was important to take into consideration the appellant’s youth.
As I am of the view that these matters should have been taken into account when deciding whether to suspend the sentence and were not, this aspect of the sentence should be addressed afresh by this court.
The power to suspend a sentence is frequently exercised in the case of youthful first offenders with good prospects. Of course, the seriousness of the crime might render such a course inapplicable. But in the present case, although the offending took place over a period of some months, the total amount involved was at the lower end of the spectrum of fraud offences in which this level of imprisonment is appropriate. The appellant has demonstrated by his conduct before these offences were committed that he is capable of abiding by the law. Furthermore he is in employment. I also think that he should be given the opportunity of repaying the amount which he obtained as a result of his offences.
I have said that in my view the head sentence and non-parole period were appropriate. However, I would suspend the sentence upon the appellant entering into a bond which would require that he be of good behaviour for a period of three years and that he repay the proceeds of the offences by instalments. I would also include as a condition of the bond a requirement that he perform 100 hours of community service within the first 18 months of the bond.
I would allow the appeal against sentence for the purpose of suspending the term of imprisonment imposed by the trial judge on the conditions to which I have referred.
GRAY J. I would dismiss the appeal against conviction and allow the appeal against sentence. I have nothing to add to the reasons of Duggan J. I agree with the orders proposed by Doyle CJ.

[2003] SASC 114

2 May 2003